Your Down Payment

Many buyers qualify for various loan programs, but they don't have a lot of money to pay the standard down payment. Here are a few straightforward methods that will help you put together your down payment

Tighten your belt and save. Look for ways to trim your monthly expenses to save toward a down payment. You could also decide to enroll in an automatic savings plan at your bank to automatically have a set amount from your paycheck moved into savings. Some practical strategies to put together funds include moving into housing that is less expensive, and skipping your vacation for a year or two.

Work more and sell things you do not need. Try to find a second job. This can be exhausting, but the temporary trial can help you get your down payment. You can also get serious about the possessions you actually need and the items you can sell. A closet full of small things may add up to a fair amount at a garage or tag sale. Also, you can look into selling any investments you own.

Borrow from retirement funds. Explore the details for your individual plan. You may take out funds from a 401(k) for a down payment or withdraw from an IRA. Be sure to ask your plan representative about the tax ramifications, repayment terms, and possible early withdrawal penalties.

Ask for help from members of your family. Many buyers are sometimes lucky enough to get help with their down payment assistance from caring parents and other family members who may be anxious to help them get into their first home. Your family members may be pleased at the chance to help you reach the milestone of owning your first home.

Learn about housing finance agencies. These types of agencies provide provisional loan programs to low and moderate-income homebuyers, buyers interested in renovating a residence in a particular part of the city, and other specific kinds of buyers as defined by the agency. Working with this type of agency, you probably will be given a below market interest rate, down payment assistance and other perks. These types of agencies may help you with a lower rate of interest, help with your down payment, and provide other assistance. These non-profit agencies were established to build up community in particular areas.

Learn about low-down and no-down mortgages.

• Federal Housing Administration (FHA) loans

  The Federal Housing Administration (FHA), a part of the U.S. Department of Housing and Urban Development (HUD), plays a significant role in assisting low and moderate-income families get mortgage loans. Part of the U.S. Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) helps individuals get FHA assists first-time homebuyers and others who might not be eligible for a traditional mortgage by themselves, by offering mortgage insurance to private lenders. Down payment requirements for FHA loans are smaller than those for conventional mortgages, even though these loans have average rates of interest. The required down payment may be as low as 3 percent while the closing costs could be covered by the mortgage.

• VA mortgages

  Guaranteed by the Department of Veterans Affairs, a VA loan qualifies veterans and service people. This particular loan does not require a down payment, has reduced closing costs, and offers a competitive rate of interest. Even though the VA does not provide the mortgage loans, it does certify eligibility to qualify for a VA mortgage.

• Piggy-back loans

  A piggy-back loan is a second mortgage that closes at the same time as the first. Often the first mortgage covers 80% of the purchase amount and the "piggyback" funds 10%. The homebuyer pays the remaining 10%, rather than come up with the typical 20% down payment.

• Carry-Back loans

  With a carry-back mortgage, the seller loans you part of his or her equity. You would borrow the largest portion of the purchase price from a traditional mortgage lending institution and finance the remaining amount with the seller. Usually this form of second mortgage will have higher interest.